Management and legal challenges for social entrepreneurship in Portugal

Abstract

Social entrepreneurship has established itself as a relevant instrument in the response to complex social challenges, integrating innovation, social impact and economic sustainability. In Portugal, as in many other countries, this sector has grown through the creation of social purpose organisations that often operate in vulnerable contexts and with limited resources. However, social entrepreneurs face significant challenges, particularly in terms of organisational management and the adequacy of the legal framework for their initiatives. Ambiguities in the political, legal and organisational spheres lead to difficulties in carrying out their activities. This research aims to identify and analyse the main legal and management challenges faced by social entrepreneurs in Portugal. Drawing on a multidisciplinary theoretical framework that integrates the resource-based view, stakeholder theory, and legal structure analysis, the study presents a critical review of the current state of social entrepreneurship in Portugal. The literature reveals gaps in performance measurement, funding mechanisms, and the adaptability of legal forms to accommodate hybrid business models. Through the analysis of existing programmes and empirical evidence from national and international research, the article identifies the structural weaknesses of the current support ecosystem. To achieve the research goals a qualitative research methodology was adopted to conduct the study, namely the focus group. The findings point to the urgent need for reforms that enhance legal clarity, improve access to diversified funding sources, and promote capacity-building strategies tailored to the specificities of social enterprises. Emphasis is placed on the mismatch between the innovative and collective nature of social entrepreneurship and the rigidity of existing legal and financial frameworks. Furthermore, the study highlights the importance of integrating robust impact measurement practices and financial literacy into the strategic development of these ventures. The study contributes to a deeper understanding of the Portuguese social entrepreneurship ecosystem and offers actionable insights to inform future policy, academic research, and the strategic development of social ventures.